The first few days of 2017 made the growing Bitcoin society very excited. The price of the digital currency exceeded the $1000 mark and even managed to climb to $1140 on January 4th. Unfortunately, the very next day reduced the bulls’ hopes to ashes, after Bitcoin plunged to as low as $885 in a matter of hours. To make things worse, the crash did not stop there – it reached $751 on January 12th, when it finally found support strong enough to bounce up from.
There seems to be a lot less pressure now with BTCUSD currently trading around the $900 level, but is this the resumption of the larger uptrend or just a corrective recovery before the next selloff? The hourly chart below might help us find out.
Above you can see the entire 2017 roller coaster. What matters to us is that the weakness between $1140 and $751 is not a five-wave impulse, but a simple (a)-(b)-(c) zig-zag correction. Corrections might be sharp and fast, but are still nothing more than interruptions of the bigger trend. This means that if this is the correct count, Bitcoin should continue to the north and eventually exceed the last major high at $1140. In order to do that, the current advance should evolve into a full five-wave sequence, followed by another three-wave retracement marked on this chart as wave (2). Wave 4 of (1) looks like an a-b-c with a triangle in the position of wave “b”, further supporting the positive outlook.
So, in conclusion, it was scary, but we believe the crash is over and the rest of 2017 is going to be a lot better for Bitcoin bulls than its first month was. $751 should be safe from now on. Chances are the next attempt to reach a new all-time high is going to be successful.